Chamber says it still backs infrastructure deal

From: POLITICO's Morning Money - Tuesday Oct 05,2021 12:03 pm

Oct 05, 2021

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Chamber says it still backs the BIF — Bunch of confusion on Monday evening as a report suggested that the U.S. Chamber of Commerce, which remains among the most influential lobbying voices in American industry, was yanking its support for the $1.2 trillion bipartisan infrastructure spending bill out of concern for its linkage (mostly by progressives) to the larger reconciliation package that includes a bunch of tax hikes business groups hate.

Not so, said the Chamber in a statement late on Monday : “An Axios story earlier this evening incorrectly stated the U.S. Chamber of Commerce’s position on the bipartisan infrastructure bill.

“The U.S. Chamber of Commerce continues to support the Senate-passed bipartisan infrastructure bill and believes it should pass the House as a stand-alone bill unlinked to the proposed tax and spend reconciliation bill. The Chamber is continuing and expanding its efforts to defeat the reconciliation bill and opposes efforts to link the infrastructure bill to the reconciliation bill.”

Between the lines — Chamber members are super eager for the hard infrastructure spending package so the group can’t really punt on it. But members are also increasingly worried about the price tag and tax elements of reconciliation so the group has to make clear it is strongly opposed to the two bills moving together.

Build Back Better price-drop — Progressives, meanwhile, got mad at President Biden for admitting that he would not ultimately get the full $3.5 trillion package he wants done in the reconciliation bill, via our Julian E.J. Sorapuru:

“Biden acknowledged … that an eventual reconciliation package is ‘gonna be less’ than the $3.5 trillion price tag he originally attached to the package, confirming reports from those attending his Friday visit with Democrats on Capitol Hill. …

“He also laid the blame on why Democrats had to punt their effort to pass an infrastructure bill, H.R. 3684, into October, on Sens. Joe Manchin (D-W.Va.) and Kyrsten Sinema (D-Ariz.), who have held the line against that higher price target.”

Progressives can get as mad as they want at Biden , Sinema and Manchin but the numbers are what they are and Biden is just nodding to reality that $3.5 trillion ain't happening.

GOOD TUESDAY MORNING — Gird your loins for the Battle in Boston tonight. Expect heavy tweeting. Email me on bwhite@politico.com and follow me on Twitter @morningmoneyben. Email Aubree Eliza Weaver aweaver@politico.com and follow her on Twitter @AubreeEWeaver.

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Driving the Day

President Biden travels to Michigan where he will deliver remarks on the two spending measures at 3:35 p.m. local time at the International Union of Operating Engineers Local 324 in Howell … House Financial Services has a remote hearing at noon on “Oversight of the Securities and Exchange Commission: Putting Investors and Market Integrity First” with SEC Chair Gary Gensler …

Senate Banking has a nominations hearing at 9:45 a.m. followed by a hearing on "Afghanistan's Future: Assessing the National Security, Humanitarian and Economic Implications of the Taliban Takeover.” … U.S. Chamber Executive Vice President & Chief Policy Office Neil Bradley is to be on C-SPAN at 8 a.m.

BIDEN AGENDA IN LIMBO — Our Marianne LeVine, Burgess Everett, and Sarah Ferris: “Congressional Democrats don’t want to talk about the discord around the total cost of President Joe Biden’s social spending plan, even as that elusive figure remains the biggest impediment to the party’s agenda.

“The disagreement is holding up not only the larger social spending package, but also the bipartisan physical infrastructure bill, which progressives have threatened to tank absent a broader deal on the administration’s twin priorities. Without an agreement between progressives, the White House and Sens. Joe Manchin (D-W.Va.) and Kyrsten Sinema (D-Ariz.), Biden’s entire domestic policy agenda is in limbo.”

WARREN CALLS FOR SEC PROBE OF FED TRADES — Our Victoria Guida: “Sen. Elizabeth Warren … called on the Securities and Exchange Commission to examine whether top Federal Reserve officials violated insider trading rules, as the Fed announced its inspector-general has opened an investigation.

“In a letter to SEC Chair Gary Gensler , Warren (D-Mass.) called for a full investigation of trading activity by high-level Fed officials. She pointed to new revelations that Vice Chair Richard Clarida moved between $1 million and $5 million out of a bond fund into stock funds in February 2020, just a day before Fed Chair Jerome Powell put out a statement signaling that the central bank might take action to cushion the economy at the onset of the pandemic.”

KEN GRIFFIN WOULD NOT BACK TRUMP — Bloomberg’s Alan Mirabella: “Hedge fund manager Ken Griffin, a major donor to Republicans, ruled out supporting Donald Trump for another run for president. ‘I think it’s time for America to move on,’ he said in a discussion Monday with Erik Schatzker at the Economic Club of Chicago.”

THE MILKEN INSTITUTE GLOBAL CONFERENCE 2021 IS HERE: POLITICO is excited to partner with the Milken Institute to produce a special edition "Global Insider” newsletter featuring exclusive coverage and insights from one of the largest and most influential gatherings of experts reinventing finance, health, technology, philanthropy, industry and media. Don’t miss a thing from the 24th annual Milken Institute Global Conference in Los Angeles, from Oct. 17 to 20. Can't make it? We've got you covered. Planning to attend? Enhance your #MIGlobal experience and subscribe today.

Markets

STOCKS FALL ON TECH SLIDE — AP’s Damian J. Troise and Alex Veiga: “Technology companies led a broad slide for stocks Monday, as the market lost more ground following its worst week since winter. …

“Losses in technology stocks pulled the Nasdaq 2.5 percent lower. Apple fell 2.9 percent and Microsoft fell 2.4 percent. Big communication companies also slipped. Facebook fell 5.5 percent a day after a former employee told “60 Minutes” that the company has consistently chosen its own interests over the public good. The social network and its Instagram and WhatsApp platforms also were apparently down worldwide as of midmorning on Monday.”

MARKETS’ HOT SUMMER BECAME A SWOON. WHAT’S NEXT? — NYT’s Matt Phillips: “Just four weeks ago, the stock market looked unstoppable. Seven straight months of gains had left the S&P 500 index up 21 percent for the year, corporations enjoyed record profits and economists predicted the fastest growth in decades. All that changed in September.

“The S&P 500 suffered its worst monthly drop since the start of the pandemic, as investors jettisoned tech stocks, small companies and industrial shares in the face of a befuddling mix of signals about the next chapter of the pandemic recovery.”

Fly Around

TREASURY TO BEGIN REDISTRIBUTING RENTAL-ASSISTANCE MONEY TO HIGH-NEED COMMUNITIES — WSJ’s Kate Davidson: “The Treasury Department is set to soon claw back federal rental assistance from groups that haven’t acted to spend enough of the money so it can be given to other communities with greater need, according to new guidance published Monday.

“The rental-assistance program is overseen by the Treasury Department but relies on a patchwork of more than 450 state, county and municipal governments and charitable organizations to distribute aid. Many of those groups have struggled to launch their local programs, hire staff and craft rules for how the money should be distributed, as they faced a crush of applications.”

STATE DEPARTMENT SAYS U.S. IS REVIEWING FINDINGS FROM PANDORA PAPERS — Reuters: “The United States is reviewing findings of leaked financial documents known as the Pandora Papers, but is not in a position to comment on specifics, State Department spokesman Ned Price said on Monday.

“A massive leak of documents was published by several major news organizations on Sunday that allegedly tie world leaders to secret stores of wealth, including King Abdullah of Jordan, Czech Prime Minister Andrej Babis and associates of Russian President Vladimir Putin.”

FED PREPARES TO LAUNCH REVIEW OF POSSIBLE CENTRAL BANK DIGITAL CURRENCY — WSJ’s Andrew Ackerman: “The Federal Reserve plans as early as this week to launch a review of the potential benefits and risks of issuing a U.S. digital currency, as central banks around the world experiment with the potential new form of money.

Fed officials are divided on the matter, making it unlikely they will decide any time soon on whether to create a digital dollar. Unlike private cryptocurrencies like bitcoin, a Fed version would be issued by and backed by the U.S. central bank, a government entity, as are U.S. paper dollar bills and coins.”

FED’S BULLARD: BUSINESSES HAVE NO PROBLEMS RAISING PRICES — Reuters: “U.S. businesses are having few problems raising prices on customers for the first time in years, St. Louis Federal Reserve Bank President James Bullard said on Monday, as he warned that inflation could remain elevated for some time to come amid fears higher expectations become entrenched.

"Bullard's business contacts in his Fed district and around the country ‘typically say 'don't worry my company's going to be profitable because I am going to raise prices and we've had no difficulty raising prices in this environment,'’ Bullard said during an event held by the International Economic Forum of the Americas.”

DIVERSE BOARDS TO PICK THE NEXT BOSTON, DALLAS FED BANK CHIEFS — Reuters’ Ann Saphir: “The searches soon to get underway for two new top U.S. central bankers will be an important test for what has been a rallying cry of sorts for proponents of diversity: that boards matter. Federal Reserve Chair Jerome Powell has pledged to seek diverse candidates for the jobs vacated by Boston Fed President Eric Rosengren and Dallas Fed President Robert Kaplan after public outcry over their personal securities trading.

“And after years of deliberate change under Powell, Fed Governor Lael Brainard and former Fed Chair Janet Yellen, the regional Fed bank boards that will run the searches and make the new hires now have far more women and minorities than they did when Rosengren and Kaplan were hired.”

NEW ON STABLECOIN — Former CFTC Chair Tim Massad has a new report about stablecoin regulation for Brookings: “Financial regulators should not only address the risks that stablecoins pose but keep their aim on that broader goal of modernizing our payments system and improving access to the financial system.”

HAPPENING THURSDAY – POLITICO’S FIRST EVER DEFENSE FORUM : President Joe Biden is making critical shifts in the Pentagon’s priorities, including fully withdrawing all U.S. troops from Afghanistan, scaling back U.S. military presence across the Middle East and rethinking the positioning of military forces around the world to focus more on China. Join POLITICO on Oct. 7 for our inaugural defense forum to talk to the decision makers in the White House, Congress, military, and defense industry who are reshaping American power abroad and redefining military readiness for the future of warfare. REGISTER HERE.

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